Cost Approach Overview

Hours: 7 CE Cost: $125.00

The cost approach is not dead. It can represent a meaningful indication of value. This seminar will offer a comprehensive review of the cost approach. Six methods to develop a site value will be reviewed, including: sales comparison, allocation, extraction, land residual, ground rent capitalization, and subdivision development. Examples will be offered for each method.

Three methods for developing a cost new estimate will be presented including: comparative-unit, unit-in-place, and quantity-survey. Cost index trending will also be reviewed whereby an appraiser can convert an older actual cost of construction (historical cost), into a current cost estimate by applying a cost index factor.

Depreciation will also be discussed in detail. Four methods for developing a depreciation estimate will be discussed, including: economic age-life, modified age-life, sales abstraction, and breakdown.

Adjustments to the cost approach indicated value for non-fee simple estate valuation will also be discussed.

A great review or first time experience with the cost approach.